What you need to know:

• Hipages flipped from a decade of heavy reliance on paid search to acquire customers and invested heavily in brand for three years to “get off the drug of paid search”.
• Google’s powerhouse direct response channel has seen its contribution to the Hipages business over that time halve as it attracts more – and more loyal – customers directly from brand building efforts. Hipages brand awareness is up nearly threefold to 66 per cent, a “meteoric rise”, per Tucker.
• Online marketplaces require different capabilities, not yet grasped by many marketers – essentially the job is to create “liquidity” for supply and demand between Hipages’ buyers and sellers, much like equity markets.
• Paid search, while no longer the biggest driver for acquiring customers, remains critical in driving tactical campaigns to attract more tradies to the platform to meet rising demand – by postcode – or attract more households to fill the jobs pipeline for trades needing work. 
• Conversion rate optimisation – testing for incremental gains in how users engage on the Hipages platform – has for instance, improved signups rates for bringing on new tradie subscribers by 20 per cent. But there’s no silver bullet – Ellery says it’s about finding dozens of one per cent incremental gains in Hipages messaging and UX.
• Content to prime the mid-funnel between brand awareness and sign-up or a job posting is a big focus for 2023 – Hipages is hunting for an inbound marketing platform and is overhauling its broader tech stack. 
• Hipages is reviewing its sponsorship of The Block on Nine – where it sunk all of its brand budget in 2020. Tucker and Ellery remain fans of TV – albeit “it’s expensive” – but are investigating whether they should tap a different audience to the Block with their ongoing brand building efforts. Ellery says brands can be built in online channels, video particularly.
• Plus, it's also planning a PR offensive.
• Investors are watching – Hipages FY 22 results saw group revenues lift 11 per cent to $61.9 million and total jobs top 1.63 million for the year but rising costs – including an increase in marketing from $16m to $18.8 million – saw net profit decline from $1.2 million in 2021 to a loss of $910,000 in 2022. Hipages shareprice yesterday was 0.96c with a market capitalisation of $124.8 million, down from its initial listing in November 2020 of $2.45 and a market cap of circa $318.5 million. Its shares peaked in mid-2021 during Covid at circa $4.08.
• The company’s market guidance for FY 23 included double digit revenue growth for the second half.   
• Get the entire Hipages strategy unabridged and in your ears via the podcast here.    

Risk and reward

In 2019 Stuart Tucker quit the Commonwealth Bank to join the now-listed Hipages as Chief Customer Officer. A few months in he concluded the platform – or marketplace – that connects households and businesses with tradies was too reliant on acquiring customers from Google’s paid search powerhouse. It was increasingly expensive and many households which signed up to Hipages via a paid search link never returned, even after their first Hipages job was a success. 

Tucker deployed an old-school marketing fix shunned by Silicon Valley start-ups and growth hackers in which marketing funds were diverted into a brand building program in mainstream media like free-to-air TV and broadcast radio. The idea was to attract customers direct to Hipages without having to pay Google – as much. 

It was new and risky for the team and founders at Hipages after a decade pouring millions into paid search but they backed Tucker and Marketing VP Nick Ellery to roll the dice on a multi-year brand building plan and it worked. Awareness for Hipages has surged from 27 per cent in 2018 to 66 per cent last year. Moreover, jobs posted on the marketplace by households that come through paid search links have more than halved from 46 per cent to 20 per cent. In other words, people are going direct to Hipages rather than finding it via paid search because the brand has, in Ellery’s words, landed in consumer “memory structures” after the multi-year focus on brand building. 

“Investing in brand has actually given us long term commercial benefits and we're now less reliant on paid search as a mass channel,” Tucker told Mi3 in today’s podcast.

“Now the challenge for us is to flip our brand investment from the consumer side to the tradie side and back again depending on whether marketplace [demand] is in balance or not. If we didn't have the halo effect of long-term brand investment, it wouldn't work because we don't have enough money to be in market every week. But by virtue of that alone we are seeing a halo effect because we just don't have the tens of millions of dollars that many of our marketing colleagues have to invest in ongoing above-the- line activity," says Tucker.

“When you look at tech businesses, most of them are a bit obsessed with social acquisition from a paid perspective and paid search. Hipages is a really great example of a tech business that’s done things a bit differently. We've got a pretty good model that could be replicable for quite a number of other businesses.”

Outplaying Google 

But first to paid search and how Hipages uses the powerhouse channel. Management of search is in-housed in Ellery’s broader marketing team with three specialists that are “running millions of search terms across the country” for every postcode and tradie category. 

“It's really interesting – the role of paid search was previously the volume driver. It was bringing in most of our customers,” says Ellery. “But when you looked at our business, we weren't getting a great number of repeats out of those users.”

The problem for Ellery and Tucker was essentially that Hipages is so easy to use that there is “not a lot of faffing about” on the platform by consumers or tradies.

“If you post a job on Hipages and you need a tradie, within five minutes your phone will be ringing,” says Ellery. “So when you've got someone who's not familiar with the proposition coming in via paid search, typing in some details really quickly and then the transaction has been taken offline to the phone ... it's not a memorable experience. The product itself was not building our brand."

Fast forward to now, says Ellery, "and there's a much larger number of people that understand the proposition of Hipages – because we built that brand and we built those [consumer] memory structures. So now when someone posts a job on Hipages and they've come by a direct channel, we'll not only get a pretty good cost per acquisition compared to paid search, but we know that from a consumer perspective, they will be a customer that's more likely to repeat over time.”

Equally, tradies that come directly to Hipages rather than via performance channels like search convert in terms of sales at a much higher rate. “So we see that we can drive volume, but also the quality of those customers from the brand building activity is actually significantly improved versus performance,” says Ellery.

But performance media still plays a “very important role” for marketing, per Tucker and Ellery.

“On the one side, if we need to top up jobs somewhere, we look at the tradies in Sydney – say all the electricians in Sydney – and we might see they're starving for more jobs. We'll use paid search to try and top up the jobs in that area. And if we're looking at plumbers in Melbourne, they might be pretty flush with jobs right now and don't need that extra work, so we might actually pull back a little bit of that paid search activity. We use it in a very targeted way, in a very sort of strategic way to balance the marketplace rather than just driving mass volume of jobs.”

Marketplace marketing goes liquid

When Tucker and Ellery speak of “balancing demand” and “liquidity” in a two-sided marketplace of buyers and sellers, their biggest challenge is the perpetual tension of creating and matching demand and supply daily while continuing with brand investment. They need to build Hipages as a B2C and B2B brand simultaneously and, per Ellery’s explanation on paid search and performance media, manage short-term volumes for two entirely different customer sets, in real time, down to postcode level.

That requires more sophisticated data feeds to inform fast direct response media channel tactics like paid search when plumbers need jobs around Hawthorn in Melbourne next week, or household demand for sparkies is surging today in Hornsby on the outskirts of Sydney. It’s about mastering brand and performance levers on the fly. 

“The liquidity occurs when that match happens successfully and a homeowner can often be matched with three trades within a space of minutes,” says Tucker. “They then can get quotes from that tradie and then arrange to get the work completed. So for marketing in a marketplace, we have to be agile. We have to be constantly looking at the lead metrics of marketplace engagement and that moment of truth, or what we describe as the ‘aha’ moment when a consumer matches successfully in real time with three or sometimes more tradies.

"Instead of just sitting back and waiting, we’ve got to be looking at those triggers and signals. As Nick said, if we need plumbers in Western Melbourne or we need more plumbing jobs in Western Sydney, we’ve got to be able to pull those levers. That's the new role of performance channels like search – to manage that balance. It's not to drive the bulk of transactions, it's to be much more targeted and balance the marketplace.”

Conversion rate optimisation fires up 

Beneath all the high visibility brand work and tactical demand generation in search, Ellery and Tucker have uncovered new revenue growth through incremental testing and tweaks to the Hipages user experience. Ellery says dozens of tiny A/B tests and tweaks to the journey of how tradies sign up to a subscription to Hipages – 34,000 now pay to be on the marketplace – has seen conversion rates lift 20 per cent.

“It's everything from the load times for the page to the message that's on the page, the use of the photography, how we position the sign-up form, whether the form is one massive form or two small broken down forms,” says Tucker. “There's category differences from one to the next – and that iteration of the form happened over 20 tests, probably more. Nick leads a growth team, which is led by a very tech-savvy growth product manager who navigates between the needs of marketing and the tech side of our business. People might think that CRO is boring but we look at it as a growth driver and if we think about the capability of the modern marketer, they've got to be really open to experimentation. We love this team because they just go test, test, test, test." 

Ellery says Hipages brand and performance strategies are backed by a “cross-functional approach" to growth. 

“if you've got fixed demand in a [tightening economic] market like we think we may be heading into, it's really just making sure that we make the most of the existing demand by doing things like CRO,” he says.

“CRO often gets pooh-poohed but we've been able to drive very meaningful results. If you looked at our tradie registration form 18 months ago, it's unrecognisable to where it is now. I haven't added all the incremental changes because it's one per cent here, one per cent there. But conversions have improved 20 per cent.” 

Tucker says it means "you get 20% better return from your investment or you can cut your costs by 20 per cent and get the same return".

The Block on the block

Hipages sponsorship of The Block in 2020 kickstarted the shift to building brand and the aforementioned near trebling of brand awareness for the platform. Now it's under review for several key reasons – cost, audience profile and the belief now by the Hipages team that brands can be built online, not just via mass media.    

“The Block has been a great partnership with us,” says Ellery. “We're in the process of pulling apart whether we continue with The Block. The chief consideration there is actually do we continue to reach the same audience and drive brand salience or do we try and reach new audiences and build a brand from scratch with people that we've never spoken to before? With the limited budget, we can't do both and that's always the tension around looking at The Block investment," he adds.

"But I think more broadly when we first started to build the brand, I was new to Hipages. We sponsored The Block and that was all we did. It was a blip in time and we saw really good short-term and longer-term impact from it. But then we went quiet for six months on the consumer side and we had nothing on the tradie side," says Ellery.

"Over the past few years we've continued to work with The Block and again, it's been a great partnership – but we want to build on that. Over the past 18 months we've also tried to make some resource available to build the tradie brand, which is very different activity to building a consumer brand.”

Is there any concern then about the ongoing declines in audiences for linear TV? 

“TV might be considered an old fashioned channel,” says Tucker. “But our homeowner audience is essentially 35- plus. They're still there. And what works well for us is when we can demonstrate our product.”

Ellery says Hipages has it eye on linear audiences. “We are complementing the slow decline in TV audiences with a lot of BVOD, a lot of digital video. The cat is well and truly out of the bag that you can build brand fairly effectively with online video, with digital video. TV is also very expensive so we're looking to try and complement that with other ways to build brand. Realistically, PR is one of those things where we've been building that capacity slowly in-house. And that's going to continue to be a big focus – having other people talk about our brand.” 

Fill the mid-funnel with content 

For this year, whatever the economy brings, Hipages is getting serious about content as a bridge between upper funnel brand building and lower funnel performance media. 

“The missing piece moving forward for us is the mid-funnel, which is actually all around content,” says Ellery.

“We're doing the groundwork now to have a really strong content play for tradie acquisition and retention. We've hired a senior inbound marketing manager, we're going through a process now of identifying which inbound marketing platform we want to roll out to support her. We've also got a senior content marketing manager, she's working on the content strategy. So certainly from a B2B or a tradie perspective, we know that there's an opportunity – and definitely capability – we need to build around. You can call it inbound marketing, you can call it mid funnel marketing," adds Ellery.

"Tradies are on social a lot, they're online a lot – and that's the best way to reach them with the exception of radio. This not just a straight advertising play, it's actually adding a bit of value for the customer so you've got a bit of a relationship even before they get to that point where they go, 'gee, the next few weeks are looking a bit tough, I need some extra work to fill the calendar' and head to Hipages.” 

In about three weeks time Hipages will release its interim results for the six months to December 2022 and investors will see whether more sophisticated marketplace marketing has lured more tradies – and consumers – to land on Hipages, profitably. 

Get the entire Hipages strategy unabridged and in your ears via the podcast here.